Deutsche Bank named the two tech giants top stock picks for 2026 thanks to their massive AI infrastructure footprints and overlooked revenue streams.
Amazon Web Services is expected to add 15 gigawatts of capacity over the next two years.
When it comes to artificial intelligence, Amazon.com and Oracle face plenty of skepticism from investors, whether due to their competitive positioning or their financing strategies.
But that could change soon, as Deutsche Bank believes these two companies are playing critical roles in the massive AI infrastructure buildout.
In its latest "Fresh Money" report for the first quarter of 2026, which compiled top investment ideas from analysts, the bank named both Amazon.com and Oracle as high-conviction picks.
Despite increasing capacity, reaccelerating cloud growth and deal announcements with OpenAI, Amazon hasn't been able to fully convince investors of its AI potential. Shares of the company gained just 5% in 2025, trailing the S&P 500's SPX 16% increase.
Analyst Lee Horowitz expects the "AI 'loser' overhang" over Amazon's stock to lift this year, writing on Friday that Amazon Web Services could add 15 gigawatts of capacity over the next two years. Horowitz believes the recent OpenAI deal "barely scratches the surface," and that this capacity expansion will fuel a reacceleration in AWS revenue growth.
Amazon's e-commerce business "remains a well-oiled machine" delivering consistent revenue growth and capturing global market share in a slow-growth retail environment, according to Horowitz. Improvements in shipping efficiency are driving margin expansion, and Amazon's shopping assistant Rufus could prove to be a secret weapon. Horowitz estimates Rufus is already unlocking $10 billion in incremental revenue.
"We believe investors can comfortably underwrite 20% operating income growth for Amazon going forward," Horowitz wrote.
Earlier this week, Bank of America analyst Justin Post also named Amazon a top pick for 2026 and highlighted the potential for Rufus to help Amazon become a leader in agentic shopping.
While Oracle's stock received a spike in investor interest in September on news of its pipeline of AI deals, initial enthusiasm soured on concerns surrounding the company's debt levels and financing plans. Shares of Oracle have lost over 40% since their September peak.
Analyst Brad Zelnick at Deutsche Bank expects that Oracle will provide "financing clarity" in the coming quarters, a move that could ease some investor concerns surrounding the stock. But Zelnick believes financing jitters are overshadowing Oracle's leading role in building AI infrastructure, as the company's future contract value has ballooned to over $500 billion from $65 billion just two years ago.
Zelnick believes Oracle holds a distinct edge in deploying clusters of AI chips thanks to its long history with parallel computing and high-speed processing.
Oracle's traditional cloud business is also "underappreciated" by investors, Zelnick said. He noted that the non-AI segment has grown roughly 40% over the last two years, stealing market share from larger cloud rivals along the way.